Here's a bedtime fairytale or perhaps fable (because there's a lesson to be had), and hopefully it will help you to avoid some major loss of all or part your wealth... I've tried to make this fable short, sweet, and readable, as to quickly teach the lesson. Please heed the warning!
(TIME STRAPPED? SCROLL TO THE END AND TAKE A QUICK LOOK AT THE QUICK LIST OF 8 THINGS I LEARNED)
ONCE UPON A TIME, A LONG, long time ago...
(Actually back to the spring, when I first got into crypto trading.)
Talk about GREEN! I knew NADA about bitcoin. I knew NADA about trading, and even less about Alt Coins (in fact, I didn't even know they existed). Nevertheless, I had a full Bitcoin in my hand, and I was ready to trade, and make a fortune, or so I imagined. I wanted to trade with the big boys, and win. I wanted to trade and win just like the stories of those who went before me (although only by six months), stories of wealth, and glory, and the magical Vertaseum...
"A fool and his BTC too soon shall part."
Backstory: (exactly what was I doing with BTC?)
Way Back in 2013, I actually purchased a total of about ten bitcoin, over several months. I just loved the idea of BTC because I was a new dad, and was frightened about the economy. Bitcoin was private, secure, super fast to transact with, and it also came with little or no fees to transact. I thought it so cool that one could use BTC to purchase things, albeit only from other Bitcoin users - there weren't too many of us, but there was enough of us to get by, if the need arose. If there's one thing we 'preppers' had a knack for, it was storing crap, and increasing our stores of crap - heaven knows for what, but nevertheless, I had to come up with a way to increase my store of BTC.
My plan was to sell BTC on ebay, using the profits of my ebay sales to allow me to, in turn, increase my holdings of BTC. Sad to say, people were scamming bitcoin from the start. Turns out a purchaser on ebay claimed that his/her account was hacked at nearly the moment the two BTC purchased from me, left my wallet. After the formal complaint to Paypal, the 'buyer' was awarded a full refund for their loss, right outta my pocket. Kay sera sera, as it happens, such went the first two of my ten BTC - right down the drain. I didn't get overly upset regarding the 'theft', since the value of the 2 coins at the time was probably about $500 or $600 (boy, I'd have been grated if that same thing transpired today, at $17K per coin.)
Failing to increase my holdings, I abandoned the Ebay venture, and held tightly onto my bitcoin. I held on very tightly. That is, until the price of BTC rose all the way up to $600 bucks. In July of 2016, I sold out six of my last 7.16 BTC. Luckily, I had the sense to hold back exactly 1.16 BTC (you never know, right?). Anyway, in my mind I made a 300 percent profit, and I was satisfied with myself and my profits at the time of the sale. After all, who knew?.
An investor never gives up his entire holding, but I was no investor. Nevertheless, as I mentioned, I held back exactly 1.16 BTC, and that is what I started trading with in the late spring/early summer of 2017. I learned about bittrex, and alt coins, and quickly brought myself up to speed regarding the basics of buying and selling both. I didn't bother to know anything else about trading, like volume, technical analysis, cycles, market caps, stop loss, and the dangers of GREED. I didn't even know what a market cap was, I just wanted in. I poured my money into what turned out to be very good coins. I had heard through the grapevine that the way to earn more bitcoin was to use the lesser altcoins as leverage, and that's exactly what I did.
In looking back, I think many pro's (even today) would have signed off on the hand I was holding. I had some BTC, LTC, ETH, DASH, and a few others... I really can't recall. A good hand, indeed, but if you will all recall back to the late spring, early summer of last year, altcoins were standing still, and consolidating. Although the Altcoins were consolidating, BTC was having none of that, and was actively climbing up, week by week, month by month, ever higher. It seemed that alt coins would never catch up with BTC, and each day my heart would sink, as my only BTC holdings fell from a value of 1.16 BTC, down to .4 BTC. I was growing ever IMPATIENT.
What saved me (and condemned me) was NEO, the newly rebranded Antshares. Everyone who was anyone got into Antshares $4 or $5, or much less, but I was holding LTC, which was standing still like a statue. I was told never to sell at a loss, but to pick my winners and hold them until they profit. I remember the day when NEO hit $17, I just couldn't take it any longer. The stories of fortunes would tickle my novice ears, until they itched, and seemed to ache. In a frenzy, I sold out of everything, and went all in on NEO.... and it rose like a balloon up as high as $35 bucks. I was saved!
Sadly, as a new trader, with no knowledge and even less experience, I believed that Neo would be my ongoing companion that would save me from the cruel world of Alt Coins, and even make me wealthy (yes, i tasted blood and was 'G R E E D Y') I bought all in on NEO again, at $39, after having just been freed from the lion's jaws. (how foolish we humans can be). I strapped in and NEO sailed it all the way up to 50 or 60 (can't recall, it's all a blur). Even as other more experienced traders ran down past me, I continued in utmost confidence to ascend my newfound NEO ladder to wealth. I watched confidently as prices devolved to $48, then $38, and lower - much lower, as you'll recall. As summer ended, I was NEO's prisoner, condemned to live in that dungeon of uncertainty at prices as low as $13 or so dollars. Still I peered from the dungeon's window bars, and witnessed Bitcoin's glorious ascent to unimagined heights. With each and every new high, my percentage of holdings were lower. My holdings fell faster than the autumn leaves in northern New Hampshire, and my heart fell, still faster...
What kept me going were youtube videos. I learned and studied and studied some more. I listened to video after video, for hundreds and hundreds of hours (of videos), and soon I began reading articles and research, and slowly, over time; finally, i began to awaken. I learned about coins and markets, and cycles, volumes and market caps. I read white papers, and listened to other people's reviews of coins. I took small little seminars in technical analysis and trading. I learned what I did wrong with NEO, and earlier trades. I learned that the patient WIN, and the impatient LOSE. I learned to sell the GREED, and BUY the FEAR... and, I learned what it actually meant to 'buy the rumor, and sell the news'.
Frankly, I had so little holdings left (outside of NEO). With just a small fraction of a BTC, I split it up still further, nevertheless, into what would be a carefully diversified spread of my holdings. I watched my favorite youtubers espouse their own favorite coins.... But this time, I read into and verified their calls. I carefully analyzed each and every one of them (with my own limited ability). Oftentimes I realized that some of these youtubers were speaking with less than 3 or 4 months of experience, and were presenting themselves as if they had been trading for decades. I eventually sorted out the professional traders from the hawkers and the shills, and finally, over time, I began to make a few good calls.
I made a few dollars here and there and jumped out of the trades before the top, and then in turn, I bought back in before falling all the way back to the bottom. Lesson one, avoiding greed. The good calls added up over time, and there was even one time when the best call was to actually purchase NEO, at $22 dollars or so, and I rode those holdings up to $33. All this was accomplished with quit a little bit of BTC. What I had to trade, was all I had, because the lion's share of my bitcoin was still chained beside me, in NEO's dungeon. My meager holdings rose to 2 tenths of a BTC, and then 3 tenths. As October passed, I scraped together some very limited cash, and I picked up a half BTC, at $6000. This recharge of holdings went into some new ventures. I purchased some Request, and some Paypie (PPP), a couple of thousand PIllar, some into LTC and Cardano, and others, and some more returns soon arrived. I was beginning to feel I might be digging myself out. Suddenly amidst the rising of all coins, the small miracle happened:l NEO broke out to $45, and even higher. I dumped 1/3 of my NEO holdings, and, as it rose over time, another third. In NEO's place, i picked up some OMG, EOS, VERI, and POPULOUS (to name a few). My holdings were coming back to life.
I don't recall the exact date, sometime in late November, when I finally sat down and added up my holdings, and they exceed one full BTC, and I was just thrilled and overjoyed. I suppose, if I were honest, that a tear came to my eye, and I felt like a prodical son, who found his way home. I was back in the game!
In recent days, Alt coins have been on a tear, and I no longer count my holdings, although I do value my holdings in Satoshis, wheren I used to only value in fiat. I'm sure my holdings are higher than when I tripped and fell, and even if they're not, my faith is not so much in bitcon, as it is in myself, and the countless others who advise me, free of charge, on youtube, facebook, Twitter, Telegram, and elsewhere online. On the other hand, I have a deep respect for the awesome power of the markets, perhaps like a sailor holds respect for the awesome power of the sea.
I thank heavens for my recovery, and my fortune to have fallen in such a forgiving market, which has only risen and has not seen a hard fall. Had I had ventured into the Forex with the same vulernerability, I'd have been swallowed up for good, with no hope for recovery. Lucky me.
Here's the lessons.
- Beware of GREED and FEAR, in yourself, in others, and in the markets.
- Trading is a transfer of wealth from the impatient, to the patient - BE PATIENT.
- Diversify your holdings, and NEVER go ALL IN. worth repeating. NEVER GO ALL IN.
- Don't overtrade. A watched kettle NEVER BOILS. BE PATIENT (it is no mistake that the same advice is in lesson 2)
- BUY, DON'T CRY, when blood is running in the street.
- SELL, DON'T BUY, when the markets are high.
- Don't CHASE TODAY'S WINNERS OR RISING STARS, (instead, spend the time finding tomorrow's winner)
- SET ASIDE SOME TIME EACH DAY, TO LEARN YOUR CRAFT.
MAJOR QUICK TIP: follow the 'vincentb' link below for loads of other trading articls from traders of all levels. And thanks so much for allowing me to share my journey. Hope it helps...
Vincentb is gonna make us RICH AS PIRATES :) !!!!